Prudential sees China and Hong Kong sales tank due to coronavirus

Insurance giant Prudential has revealed sales of new policies fell by nearly a quarter in its core Asian market as strict lockdowns took their toll.

The group reported Asian new business sales were down 24% in the first quarter of the year, with a 50% tumble in China and 19% drop in Hong Kong where restrictions came into effect earlier.

But it said sales were beginning to return to more normal levels in China and Hong Kong as lockdowns have been eased.

And Asian sales outside of these two markets lifted 1% in the three months to the end of March, though it cautioned it continues to see a “challenging sales environment in the second quarter of 2020 as social distancing measures are stepped up in other Asian markets”.

It also saw a resilient performance in the US, which did not lockdown until mid-March, with first-quarter new business sales jumping 25% year-on-year and 19% since the previous quarter.

It expects to see US sales “materially” impacted in the short term due to the Covid-19 restrictions and recent moves to increase prices across its product range.

Prudential – which last year spun off and separately listed its UK and European arm M&G on the London Stock Exchange – said it has been able to shift the bulk of its operations online to deal with the coronavirus crisis.

In Asia, it can now sell products equivalent to around two-thirds of its total new business virtually.

The group confirmed it is still considering other options for its US business alongside a flotation amid stock market turmoil caused by coronavirus.

The firm said in March that while it will continue to prepare the planned minority initial public offering (IPO) of its Michigan-based Jackson business, it will “actively evaluate” alternatives.

In its latest update, it said it would update further on the plans at half-year results in August.

Mike Wells, group chief executive of Prudential, said: “While we cannot say with certainty how the Covid-19 impact will impact the global economy and hence how Prudential might be impacted, we believe we are well positioned over the long term both to weather the disruption caused by the pandemic, and to support our customers and communities in the recovery to come.”